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Modelling Corporation Tax Revenue

John Creedy, The Truby Williams Professor of Economics, University of Melbourne, Australia and Norman Gemmell, Victoria University of Wellington, New Zealand
Modelling Corporation Tax Revenue examines the revenue growth properties of corporate income taxes and how firms respond to changes in corporation tax. It provides a companion volume to the authors’ Modelling Tax Revenue Growth, which explores the revenue growth and behavioural response properties of income and consumption taxes.
Extent: 288 pp
Hardback Price: $136.00 Web: $122.40
Publication Date: 2010
ISBN: 978 1 84844 765 3
Availability: In Stock
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  • eISBN: 978 1 84980 497 4

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Modelling Corporation Tax Revenue examines the revenue growth properties of corporate income taxes and how firms respond to changes in corporation tax. It provides a companion volume to the authors’ Modelling Tax Revenue Growth, which explores the revenue growth and behavioural response properties of income and consumption taxes.

John Creedy and Norman Gemmell examine the corporation tax structure and the implications for revenue elasticity both for individual corporations and for all firms combined. The authors highlight how asymmetries in the treatment of positive and negative profits in the tax structure affect firms’ revenues and behaviours, and demonstrate that the examination of corporation tax revenue requires a detailed treatment of dynamic aspects. Within the book, a dynamic microsimulation model is constructed and used to examine profits and taxes over hypothetical business cycles, concentrating on the revenue elasticity and profit shifting responses to tax changes.

This comprehensive yet concise book will appeal to researchers and graduate students in public finance, public economics and taxation, as well as economists in governmental departments and international organisations.
‘This book is well-written and its model carefully constructed.’
– Linda Arch, Tax Justice Focus

‘Fiscal crises around the world imply that revenue forecasting is ever more important, while globalization implies that estimating corporate tax revenues is ever more difficult. This book could thus not be more timely, as Creedy and Gemmell provide an expert analysis of both the technical issues and practical details that must be addressed in modelling corporation tax revenues. It will be invaluable to anyone involved in revenue forecasting – or anyone who wants to know what is involved in revenue forecasting.’
– George R. Zodrow, Oxford University, UK

‘Corporate taxes are an important but volatile source of revenue in leading economies like the UK. Understanding the factors that influence fluctuations in corporate tax revenues is important not only for projecting revenues, but also for designing and reforming tax systems to promote economic efficiency and keep up with the evolving nature of the corporate sector. This comprehensive analysis and modeling of corporate behavior and taxation is an important contribution toward gaining such understanding.’
– Alan Auerbach, University of California, Berkeley, US
Contents: Part I: Introduction 1. Introduction and Outline Part II: Corporate Profits and Tax Revenue 2. The Revenue Elasticity 3. Tax Loss Asymmetries 4. Taxes and Income Shifting Part III: A Simulation Model 5. The Distribution of Profits 6. Modelling Deductions Part IV: Corporate Tax Simulations 7. Revenue Elasticity Simulations 8. Tax Response Simulations Part V: Conclusions 9. Conclusions Appendices Bibliography Index